A bid is the most you're willing to pay for a click. On Amazon, though, the bid you type isn't always the bid that runs. Your bidding strategy and placement settings can move it up or down. So a bid review has to look at all the controls together, and it has to start with the product, not the keyword.
This page covers what to check before you touch a bid, how Amazon's bidding settings work, and how to make a change you can judge later.
Check the product before the bid
A higher bid can't fix a listing that isn't ready to sell. Before reviewing bids, confirm:
- The advertised ASIN is in stock, with enough cover for the review period.
- Your offer holds the Buy Box. Sponsored Products ads generally need an eligible offer to show.
- The price, pack size and images match what shoppers expect.
- The product and the ad meet Amazon's advertising rules for health-related products. Amazon has specific Sponsored Products restrictions for this category.
If any of these is off, fix it first, in its own change. Otherwise you can't tell whether the bid or the fix made the difference. For more on ads and stock levels, see stock-aware Amazon advertising.
Know your break-even point
Every bid decision needs a cost sheet for the product:
- Actual selling price.
- Product cost.
- Amazon referral and fulfilment fees.
- Other costs, such as inbound shipping and storage.
What's left before advertising is your margin. Divide it by the price and you have your break-even ACoS (advertising cost of sales). Above that ratio, each ad-driven sale loses money on its own. Below it, the sale makes money before other overheads.
Many brands accept a higher ACoS during a launch, or on products that bring repeat buyers. That's a business choice. Write it down with a spending limit and an end date. Our break-even ACoS calculator does the arithmetic.
How Amazon's bidding strategies work
Each Sponsored Products campaign uses one of three strategies:
- Fixed bids. Amazon uses your bid as set.
- Dynamic bids, down only. Amazon can lower your bid in real time when a click looks less likely to lead to a sale.
- Dynamic bids, up and down. Amazon can also raise your bid when a click looks more likely to convert. Amazon's dynamic bidding can raise bids on some placements; check the current limits in the Ads console.
Placement adjustments
You can also raise bids by placement: top of search (first page), rest of search and product pages. Placement adjustments and dynamic bidding can stack, so the price of a click can end up well above your base bid. Before you change a strategy or an adjustment, check the current limits in the Ads console, work out the highest possible bid they allow, and check that number against your daily budget and break-even point.
Read the right reports
Use a fixed date range, one marketplace and one currency. Then look at:
- Search term report. Which shopper searches triggered your ads, and what they cost.
- Targeting report. How each keyword, product or category target performed.
- Placement report. How top of search, rest of search and product pages performed.
Keep two numbers apart. Your bid is a setting. Cost per click (CPC) is what you were actually charged. They answer different questions.
Check the attribution window in the report column names, such as "7 Day Total Sales." Recent days are still filling in, so a period that ended yesterday will look worse than it is. Leave a gap before judging a change.
Check what else changed
Ad results move for reasons that have nothing to do with bids. For the same period, note:
- Stockouts or low stock.
- Price changes, coupons and deals.
- Buy Box changes.
- Listing edits.
- New competitors in the search results.
Keep those facts next to the results, so a bid change doesn't get credit or blame for something else.
Make one clear change
A good bid change is small, written down and easy to check later:
- Name the target. Campaign, ad group, keyword or product target.
- Record the current settings. Base bid, bidding strategy, placement adjustments and daily budget.
- State the change and the reason. For example: lower the bid on a target whose ACoS has stayed above break-even for a full period with enough clicks to judge.
- Set a spending limit and a review date.
- Apply the change and check what saved. Settings sometimes don't save the way you expect.
Avoid changing several controls at once. If you raise a bid, switch strategy and add a placement adjustment on the same day, you won't know which one made the difference.
Review the result
On the review date, use the same report and the same definitions as before. Compare the result against the reason you wrote down. Then decide to keep the change, adjust it or reverse it.
Keep the old settings in your notes. If the change didn't work, you can go back without guessing.
One result informs the next decision for that campaign. It doesn't prove a strategy works for every product or every account.
Choosing a strategy
There's no single right answer. Some general guides:
- Down only limits how high a bid can go, which helps when you're protecting margin.
- Up and down gives Amazon more room in auctions it rates highly, which can suit a well-converting product with strong stock.
- Fixed makes cost easier to predict and compare.
Whichever you choose, record it exactly as it appears in the account, with the bids and placement settings that go with it. A strategy name alone doesn't describe how much a campaign can spend.
How we handle this
Bid reviews are part of our weekly PPC and advertising work. Each test has a budget, a reason and a review date. Changes to listings or prices go in their own proposal, for your OK.
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